Coal chemical parks must beware of three major risks

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Coal chemical parks must beware of three major risks Author/Source: China Chemical Industry News Date: 2018-09-12 Clicks: 5 In recent years, with the growth of the coal chemical industry, coal chemical parks in areas rich in coal have seen rapid expansion. For example, Inner Mongolia has established 28 coal chemical industrial parks in a short period of time, including those for methanol, urea, coal-derived olefins, coal-derived ethylene glycol, coal-to-oil, coal-to-natural gas, and coal-derived aromatics. Due to inadequate planning and design of coal chemical industrial parks in some areas, unreasonable allocation of resources, and insufficient environmental protection facilities, the quality of development is low, which leads to frequent various problems within these parks and has drawn widespread criticism. After reviewing the situation, the author believes that three types of risks in coal chemical industrial parks require attention. The first is environmental risk. It is well known in the industry that coal chemical enterprises face greater environmental risks, more hidden dangers, and higher costs compared to ordinary chemical enterprises. For example, **coal chemical projects are required to achieve “zero discharge” of wastewater, but it is almost impossible to meet this requirement under current technological conditions. Looking at the coal chemical enterprises that are already in operation and the industrial parks that have been built, none of them are free from environmental problems. Some parks have caused environmental issues on a national scale due to wastewater being discharged into deserts, while the coal chemical enterprises within these parks have been summoned by local authorities and environmental protection agencies on multiple occasions due to environmental violations, resulting in several shutdowns for rectification. Due to the large number of enterprises in coal chemical parks, the volume of \"three wastes\" generated is enormous when combined, making it extremely difficult to handle them. It can be said that if environmental issues are not properly addressed, they will become an insurmountable obstacle for coal chemical industrial parks. The second is the coal source risk. Since coal chemical industrial parks are mostly built in areas rich in coal, both the local authorities, the industrial parks themselves, and the coal chemical enterprises instinctively assume that there will be a sufficient supply of coal, so coal should not pose any problem. But right now, there are coal chemical parks that are struggling to continue operations due to a shortage of coal. Several coal chemical parks in the Xilinhot area of Inner Mongolia are facing an unprecedented shortage of coal. Why is this? One reason is that the coal production of the enterprises located in these parks is not sufficient; another reason is that some local coal mines have been shut down as a result of measures to reduce production capacity and stricter environmental regulations, and the remaining coal output is not even enough to meet the needs of local power generation plants. Due to the difficulty in meeting local coal demands, companies are forced to seek supplies from further away; however, the high prices of coal from other regions are beyond their financial means. There are far more cases like this; a coal chemical industrial park in a certain area has been reported to be facing a shortage of coal quotas. These parks and enterprises struggle due to the lack of such quotas, which prevents them from carrying out certain expansion, renovation, or new construction projects. Over time, an increasing number of coal chemical industry clusters will face coal shortages. Third is the funding risk. Coal chemical projects generally require large amounts of investment, and if the funding is not secured, they are prone to becoming unfinished projects. For example, a coal-to-oil project with an annual production capacity of 2 million tons requires approximately 35 billion yuan in funding, while a coal-to-gas project with an annual output of 4 billion cubic meters needs even more funding, at over 380 billion yuan. As the author understands it, in many coal chemical projects in our country, after the first phase of the facilities is completed and put into operation, subsequent phases are repeatedly delayed due to a lack of funding. As a result, it is inevitable for these companies to incur losses, as it is difficult to increase their production scale. There are also many coal chemical projects that incur losses during operation, leading to broken capital chains and crises; such projects are not rare. Affected by the currently tight macroeconomic conditions, funding issues have become one of the biggest concerns for many coal chemical parks and enterprises. It is somewhat reassuring that some regions have already recognized the risks and hazards of blindly developing coal chemical industrial parks. For example, some regions have stated that during the 13th Five-Year Plan period, no new coal chemical projects will be established, nor will any new coal chemical parks be created; instead, efforts will focus on optimizing the existing coal chemical parks.